Bend room tax wrestling match far from over

After 2 ½ hours more testimony and debate Wednesday night, Bend city councilors still didn’t decide whether to send a proposed 2 percent room tax hike to voters in November. But they called a special July 10 meeting, vowed to decide then – and urged large and small lodging operators to try once more to reach a compromise.

Judging from the threads of comments amid the clash of views, such a compromise might mean a smaller, 1 percent hike during the less-busy winter and/or “shoulder seasons,” and the full 2 percent proposed by the Bend Tourism, Arts & Public Safety Initiative (www.bendtaps.com) during the summer peak period, when demand for rooms is at its highest.

That, of course, would trim the revenue from what has been pitched. But with the economy rebounding, critics of the proposed room tax hike – to help fund police and fire services, as well as tourism and “cultural” (arts) promotion in big West Coast markets – say the city’s room tax revenues are already growing once again.

As they agreed to keep the public hearing open until a special July 10 meeting, councilors seemed anxious to not wrestle with and design a compromise on their own, but to send a message to both sides in the debate that they need to stop lobbying the city and get busy crafting a more broadly supported proposal.

A sign that just might be possible came late in the night, when Mt. Bachelor President Dave Rathbun, a critic of the room tax hike (to a total of 12 percent, including a 1 percent state room tax) and Doug LaPlaca, president/CEO of Visit Bend and a proponent of the proposal, agreed to jointly host a town hall later this month, to see if there’s common ground.

On his second try at a parting message to the parties, Mayor Jim Clinton said it was “clear the council wants to wrap this up in a timely manner.”

A roundtable last Monday on the hot topic instead was more of a lobbying session with councilors present, some councilors said, with Victor Chudowsky saying it unfortunately ended “just when it was getting interesting.”

Rathbun and others said the tax hike could hurt Bend’s image as a “value destination,” where those who visit lower or mid-range lodging often note, with some dismay, the room tax on their bill. One of those hotel operators said a visitor was surprised to learn of the tax, thinking Oregon had no such taxes (obviously thinking sales tax) – and saying that he’d accept the room rate, but the higher cost meant he wouldn’t be visiting a nearby brewpub.

“I can tell you every time the gas price goes up, it affects our business,” Rathbun said, saying he was “apprehensive” about a more than 22 percent hike in the lodging tax “and what that might do, and is this the right time to be taking that risk?” But he also said he’d been encouraged by Monday’s roundtable, feeling “a lot more common ground.”

“I am very, very optimistic there could be a compromise that would take this entire community to a whole new place, and isn’t that what we want in the first place?” he asked, rather than simply a council decision on what goes to a vote.

Process and communication – or lack thereof – also was a common theme, as the city must move soon if it wants to put anything on the fall ballot. Some smaller motel operators are still miffed the city didn’t create a subcommittee or “working group” to hash out the issues after a February hearing where the proponents laid out their proposal.

Rathbun, meanwhile, said that with winter tourism a key for so many lodging operators, “I would have thought someone from Bend TAPS would have called Mt. Bachelor and asked what we thought. That didn’t happen.”

Another sticking point with some – under state law, once the tax goes above 10 percent, the percentage flips – and 70 percent goes to tourism promotion, with 30 percent for police and fire services – the reverse of how it flows now.

“We want to see tourism grow in Bend – that’s the common ground,” Rathbun said, adding that with all the focus on the issue, “I’ve had better conversations in the past 48 hours (on the topic) than I’ve had in the past 2-3 years. There’s a great opportunity here. We should seize it.”

Rathbun acknowledged that “most of our guests stay in the higher-end properties (and) in Sunriver. That doesn’t mean we want any fewer people in Bend.” And he acknowledged that the mountain “has not returned to the same growth in visitation of 10 years ago.”

Many backers of the proposal say whether compromise is reached or not, the voters should make the final call.

“Let the people vet this,” Bob Singer, KTVZ’s general manager and a Tower Theatre board member, testified. “Let the people speak. I think all the facts and figures will come out.”

But leading critic Wayne Purcell of The Riverhouse called it differently, noting the supporters have a well-financed, “well-oiled machine” that won’t make it an equal fight in the political arena – and as many have noted, Bend residents would be voting on a tax few of them would ever pay. He also was concerned that the proponents “are going to say this (funding) will ‘fix’ police and fire” budgets, when it wouldn't.

Ben Perle, VP-operations of the high-end Oxford Hotel, said the backers believe the increased marketing will benefit the community as a whole, and added: “We don’t want to put people out of business.”

Several critics of the proposed room tax hike were glad to hear the city was cracking down on private rental homes that have been operating “under the radar” and not paying the tax.

Councilor Jodie Barram said she was ready after all she’s heard to send the proposal to the voters, but other councilors said they’d rather see something a majority of the lodging industry backs, rather than 70 percent opposing it, as Purcell claimed a survey had found.

And Mayor Clinton warned: “Referring a measure (to voters) with a highly split council is not good.”

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